London's Brent crude settled $1.22 higher at $73.73 a barrel after peaking at a record $74. Posted on 04/19/2006 2:59:50 PM PDT by M. Espinola
LONDON - Oil hit a record $74 a barrel Wednesday on fears Iran's intensifying dispute with the West may hit oil supplies and after U.S. gasoline stocks dropped.
London's Brent crude settled $1.22 higher at $73.73 a barrel after peaking at a record $74.
U.S. gasoline stocks slumped more than 5 million barrels last week, government data released Wednesday showed. It was a larger fall than analysts polled by Reuters expected, and supplies are now nearly 5 percent below last year's level.
"The EIA (inventory) data are bullish in light of expectations," said Kyle Cooper, analyst at IAF Advisors in Houston. "There is nothing in this report that can put a damper on the current rally."
Gasoline prices have soared faster than crude since the start of April as inventories dwindle, while refiners run down stocks ahead of changes to more environmentally-friendly fuels in May.
Refinery maintenance has also eaten into stocks.
Brent has hit fresh records in each of the last seven sessions as the loss of a quarter of Nigerian oil supply has tightened European markets more than the United States., where crude stocks are at their highest level for nearly eight years.
U.S. May crude oil futures , which expire Thursday, settled 82 cents higher at $72.17 a barrel, the first time U.S. futures settled above $72. The soon-to-be front month June contract settled $1.03 higher at $74.12.
Tensions over Iran have fueled a $13 rally on Brent so far this year.
WAITING FOR SOMEONE TO BLINK
"It's like the Cuban Missile Crisis, we are just waiting for someone to blink," said Michael Coleman, managing director of Singapore-based hedge fund Aisling Analytics.
Tuesday, the United States failed to secure international support for targeted sanctions against Iran and President George W. Bush refused to rule out nuclear strikes if diplomacy failed to curb the Islamic Republic's atomic program.
"All options are on the table. We want to solve this issue diplomatically and we're working hard to do so," Bush said.
The United States, which already enforces its own sweeping sanctions on Iran, wants the Security Council to be ready for strong diplomatic action.
The price of oil has trebled since the start of 2002 and is nearing the inflation-adjusted peaks above $80 a barrel reached in the early 1980s, just after the Iranian Revolution.
The high prices have sounded alarm bells in consuming nations fearful of an economic hit.
The International Monetary Fund said Wednesday the impact of higher oil prices on the global economy was a growing concern. The IMF said in its semiannual World Economic Outlook that it was worried the full effects of the surge in energy prices had yet to be felt.
It called on U.S. officials to consider higher gasoline taxes to curb oil consumption in the world's largest energy consumer. The U.S. burns a quarter of the world's oil, but raising taxes is political anathema in Washington.
An election year gridlock will likely keep the U.S. Congress from moving forward with any meaningful energy legislation this year, according to industry experts.
"They have no magic wand. They can talk about conservation and driving less. But it the end it's about the individual consumer," said Robert Ebel, an expert at the Center for Strategic and International Studies in Washington.
Ministers from the Organization of the Petroleum Exporting Countries (OPEC) will consult informally next week on the sidelines of an energy forum in Qatar, OPEC sources said.
Several OPEC ministers have said there is nothing more that the group can do to bring down oil prices, as it is already pumping near full tilt.
(Additional reporting by Luke Pachymuthu in Singapore, Chris Baltimore in Washington and Timothy Gardner in New York)
When my customers ask why I'm charging more I'm just gonna pull out my gas card and say: "This is why".
You know that...and I may have known that{ Not}
But you take Joe six pack. They see paying 2.89 a Gal then they see some guy getting 400 Million....
It is hard to argue the case for capitalism when you spend for more for gas than food.
The Goverment cant do anything but make it worse.
And the bummer is that we cant blame OPEC...they can ship it, but we dont have the refineries do make gas.And since it takes, what, ten years to build one, there is no quick fix.
There are fixes, like doing away with special gas for different parts of the country, but I would sooner win a date with Jolene Blalock that see the bunny huggers allow that. And maybe do away with the Fed gas tax. HAHAHahahah sorry
Yeah. Kinder Morgan, Suncor, Valero. All are hotter than Thai peppers.
China and U.S. Square Off in Trade War
Predictable . . . Yada, yada, yada
Where is our government in our time of need now? It's getting to the point where I can't pay my bills any more because my gasoline bill has tripled in the last 5 years. Thank you oh government of the United States for sticking to the little guy again.
"All we have to fear is fear itself." What would you have your government do? Perhaps a little fireside chat?
By chance already owned some stock in a company that is involved in Ethanol production,that has done quite well too.
Finally, the Feds Taxed (read: conficated) more than TWICE what the oil industry earned in profits from 1977-2003. Last year the oil industry earned 9.5% return on revenues. Pharmaceuticals were double that.
Recall the back-door deal Saddam made with Syria's Assad. During the period of 2000 through 2003 Saddam shipped his crude via the Iraqi-Syrian pipeline, under the UN's 'oil-for-food' (profits). Saddam's deal with Assad was Syria would pay 50% below the global spot price (in cash-Euros) and then Syria could label the crude oil as Syria's and sell it on the open market at the spot prices. The same deals are ongoing with America's worst enemies.
American ground forces quickly closed down the Syrian-Iraqi pipeline within the first couple of days into the ground war to topple Saddam. Syria's thugs were ticked off :)
In terms of that great question "What percent of world oil is NOT sold on the spot market?" The amount changes on a daily basis.
Another major problem for US, comment like this:
"We do not rule out the possibility of pricing our crude oil exports in euros. That would be interesting for our European partners.
(Vladimir Putin, Russian 'President')
Exactly. If people want to get torches and pitch forks they should look toward Congress. A few wobly Republicans and lock-step Democrat devotion to the bunny-huggin' lobby leaves us with just about zilch oportunities to work our way back from this foreign dependence addiction. Instead we fall victim to the evil gouging class envy beast. Kill the Monster! Make him walk the perp walk! And after the latest sacrificial lamb is eaten, gas prices will continue to rise as they always have.
"I feel like the cowboy from Brokeback Mountain."
Dude, they were SHEEPHERDERS!
Higher price = more supply; eventually.
I just wish we were burning more neutrons instead of Iranian crude. I hate putting our treasures in their pockets.
I am proud to say..I never saw the movie.... but they looked like cowboys...
This is a question? What's your point?
Repost that DOW chart during the up coming Iranian counter terrorist war & a few powerful Gulf hurricanes, relating to a crude oil charts, other energies, gold & silver, plus oil related stocks.
Brent Crude Oil (LO, IPE) Monthly Price Chart
Never saw the movie either, but the wife keeps threatening to rent it!
In relation to the current cost of gas you have no choice.
The price of oil has trebled since the start of 2002
3x
300%
I hope the people buying oil futures lose their ass big time. It's probably not going to happen but I sure wish them very bad luck.
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